GM opens the kimono

By Alex Taylor III, senior editor


(Fortune) -- General Motors tried to set a new tone in its relations with the financial community today, showing off its new chief financial officer (with a British accent, no less), displaying a new emphasis on of corporate themes (to build world-class cars and trucks), and demonstrating a new lack of patience with nit-picking questions from securities analysts (no more line-by-line tinkering with earnings models).

But the bottom line was still the same. Emerging from bankruptcy on July 10th of last year, GM lost nearly $1 billion in the third quarter and another $3.4 billion in the fourth quarter. Excluding one-time items like $2.6 billion to the union's VEBA fund, the earnings picture brightened but still did not climb out of the red.

CFO Chris Liddell said he was "very happy with progress in the first quarter toward a goal of profitability" and he saw a "chance of achieving profitability this year."

He was cautious, however, about the prospects for an initial public offering of GM stock this year, saying it depended on "the readiness of financial markets, the state of the global automotive industry and GM's business performance." Besides the earnings results, GM embedded some other public relations messages in its announcement.

Liddell recognized retiring vice chairman Bob Lutz by name and praised his achievements in renovating GM's product line, an apparent effort to dispel rumors that CEO Ed Whitacre had forced Lutz out.

For those who complain that the new GM is being run by the same managers who drove it into the ground, Liddell displayed a chart showing that 12 of the 13 members of the executive committee are new to the company or in new positions since July 2009.

And Liddell repeated the mantra of GM executives since 1992 by declaring that rather than make predictions about GM's performance for the rest of the year, he would let its deeds speak for themselves.

He did slip into traditional GM-speak by highlighting new car models that are coming to market rather than talking in detail about cars that are already on sale. In the past, GM had a tendency to promise that prosperity was always just around the corner as it struggled to keep its unwieldy model lineup current.

And in the clay feet of idols department, Liddell let it be known that the finance operation he had taken over was still not up to par. GM was once thought to be in the thrall of the powerful unit, but in the last several years, it became apparent that the finance staff was actually not up to the task, and worse, its work had led to several SEC investigations.

Liddell reported that GM "still had material weakness in financial controls" as of the end of last year. The bad news is that GM still has a long way to go to become competitive in some areas. The good news is that there is lots of room for improvement. To top of page

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